Money management is a broad concept, yet understanding it in and out requires your honest effort. Getting hold of your expenses, budgeting wisely and spending in a moderate way while foreseeing any financial strain come under the umbrella of money management.
Personal money management is recording an individual’s overall living expenses whereas, in a broader sense, the term is used in financial markets where professional masterminds deal with planning and carrying out financial activities.
Have you ever wondered why you live from pay-check to pay-check, even being well-paid? Because you are lacking money management skills. Here come our four budgeting tips that can help you live a stress-free life at college: calculate your monthly income, make a list of your expenses, set financial goals, save for rainy days
Calculate your monthly income
As a student, you might be receiving a student grant, a loan, or receiving money from your parents or guardian every month. You may also make money by providing custom assignment help to your peers. Those who need essay writing or research paper writing can pay you for your assistance. If you work hard, you may have a high income with this kind of occupation.
Your monthly income sets a foundation for how much you can afford to spend. Take note of whether your income is fixed, this will help you decide if your budget needs to be fixed or flexible.
Make a list of your expenses
The next step is to make a detailed list of your expenses. Place them under 2 categories, in the order of their importance:
- Necessities (these are your unavoidable expenses such as rent, textbooks, food, and transportation). With this category, you don’t have much choice as avoiding those expenses is impossible.
- 2. Wants (these are flexible expenses such as dining out, streaming services, or phone bill). When it comes to your desires, you can control them and regulate the amount of money spent on this category.
Having an awareness of your needs and wants will help you cut down on spending and free income for your savings.
Set clearly defined financial goals
Your financial goals will prevent you from splurging to satisfy instant gratification.
To set achievable goals, your goals must be realistic and time-bound, otherwise, you’ll lose the motivation to follow through. An example of an inspiring goal can be visiting an expensive live conference or even buying a car.
Financial strain is a terrible thing. But having a basic knowledge or understanding of personal budget math can solve your money management dilemma.
Unfortunately, if you don’t know how to save for rainy days, you will get stuck in never-ending debt cycles. Savings create a safety net in case you lose your income. You can automate a specific amount from your main account to a savings account monthly (the amount you save depends on your income and financial goals). Inquire with your banking institution for assistance.
Saving money may be a real challenge. But if you have enough motivation, you can deal with it. Eventually, you’ll be grateful to yourself for creating a cash cushion.
According to the latest survey, Only 1 in every 3 Americans understands basic financial concepts including money management, budgeting, investing etc. The reason behind financial illiteracy is not talking about it. The topic itself is considered a taboo. However, it should be emphasized from the very start to learn and apply simple money management skills in everyday life to make the future better.
So what is a budget? A budget is a detailed statement of your income and expenses at a given period, usually monthly. Learning the basics of budgeting as a student will help you cultivate excellent habits that will shape your financial future.
Budgeting for students doesn’t have to be a daunting task, you can use a free version of a budgeting app such as pocketguard, a spreadsheet saved on your laptop, or a notebook to keep track of your spending.
Money management helps you cultivate financial habits that will shape your financial future. Know how much you earn and what you spend your money on, set financial goals, and save for a rainy day. As a student, your financial future depends on these basics of budgeting and how well you manage your money now.
Hopefully, this article has inspired you to make positive changes in your life.